''We Are Here to Help You'': Managing Relationships With Skeptical Clients

Richard Chambers, CIA, CGAP, CCSA, CRMA, shares his personal reflections and insights on the internal audit profession.

 

“We are here to help you!” This phrase seems so innocent, but at The IIA’s recent International Conference in Boston, I once again heard those six little words referred to as “the biggest lie of the internal audit profession.” As the old joke continues, the second biggest lie is management’s response: “We are glad you are here!”

The great majority of internal audit professionals are truly collegial in their relationships with clients, and hopefully most of our clients really are glad to see us. But maybe it’s time to take a hard look at how we are viewed and how we can change mistaken perceptions about internal auditors in the minds of skeptical clients. Are we viewed as nit-pickers? Maybe we’re not concentrating enough on the biggest risks. Are we viewed as time-wasters? Maybe there’s a way we can organize our work to take up less time of those subject to our audit work. Are we viewed as bearers of bad news? Maybe there’s a way we can add more balance to our reports or put a more positive tone on some of our recommendations. But perhaps there is a more simple explanation: Maybe we just need to concentrate more on transforming negative perceptions in every engagement.

Following are five simple tips that I have used to win over skeptical or adversarial audit clients. If practiced on a recurring basis, these practices can sometimes even turn the most difficult client into an internal audit advocate.

  1. Under-promise; over-deliver. Good relationships start with keeping our promises, and we can help audit clients avoid future disappointments simply by not promising results that we’re not sure we can deliver. If you’re not sure when the audit report will be approved, for example, don’t promise a report ”next month.” If you’re not sure how long the audit will continue, say so. If you promise to limit the on-site presence of your audit team to a specific time frame, you should make every effort to keep the promise. Of course, if your team discovers significant problems or potential fraud, all bets are off.
     
  2. Practice the fine art of appreciation. Thanking clients for their time at the beginning and end of an audit is obligatory — but if you are not showing appreciation for your clients throughout the audit, you are missing opportunities to turn audit adversaries into supporters. It’s particularly important to show your appreciation when you are not in agreement. If a client questions your findings or criticizes your audit, for example, try starting by saying, “Thank you so much for sharing your perspectives. How would you recommend we word that instead?”
     
  3. Don’t dwell on the past. Clients can’t undo the past, so it helps to keep conversations forward-looking. The easiest way? Limit phrases like “should have” and “failed” in your client meetings and audit reports. Instead, substitute “from now on” or “in the future.” The change is subtle, but you are repositioning internal audit from being perceived as the ”fault finders” and focusing on past mistakes, to being forward-looking and focused on future improvement.
     
  4. Practice the art of listening. We all know that listening is an important component of communication, but auditors too often forget that just because you understand your client’s point of view doesn’t mean that the client is finished talking about it. Internal audits often surface troublesome issues, and when internal audit clients are ”pushing back,” it often means they feel they haven’t been heard or that you don’t understand their points of view.
     
  5. Try and conclude every conversation with consensus. The best way to transform the skeptical client is simply to consistently strive for consensus. In only a few seconds, simple words such as, “Let’s see if we can’t find some common ground!” can diffuse a confrontational discussion and demonstrate your collaborative attitude. If, after extensive discussion, your audit client still vehemently disagrees with your conclusions, you should probably offer to reevaluate your conclusions to allow a “cooling-off period.” As the old saying goes, you may eventually “agree to disagree.” However, clients almost always appreciate your efforts to reach consensus on audit results.

Client relationships are very delicate and based in large part on trust built up over the span of time. Skeptical clients often have had bad experiences with auditors in a past life. Unfortunately, it is up to us to work tirelessly to erase their memories of bad encounters with internal auditors in the past and build a relationship built on sustainable trust in the future. I share these tips to help you in that quest. I welcome your suggestions on winning over the skeptical client. 

Posted on Jul 24, 2012 by Richard Chambers

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  1.  Richard,

    Thanks for another great post.  I especially like points 3 and 4.  I think it is always better to have forward thinking solutions driven approach.  I try to practice substituting words and phrases like “failed” with “in the future”.  I would also add that there are certain phrases that work just as well during field work.  It is important to determine why a control suffered a breakdown, however, I believe we must swiftly move from the why and how to the “how to fix it phase” but asking our clients some of the following:

    “How can this be fixed”?

    “What are some of the positive lessons learned?”

    “What have you done to change the process?”

    “Is the process better now and how?”

    We must continuously practice the art of listening.  As I noted in my article “Building Credibility with Audit Clients” (http://goo.gl/xrbmr), our clients do not care how much we know until they know how much we care.  This means listening to what they have to say.  Sometimes we have a tendency to cut clients off once we get the information we need (or the information we think we need).  But being audited is an emotional process and sometimes (as you mentioned) clients just need to get some things off their chests.

  1. Long ago, I became friends with our parish priest. He had an excellent way with people and it all revolved around his straight-forward way of looking someone in the eye and saying, sincerely and quietly, "thank you". These two words, when spoken in the right tone and with sincerity, can always maintain or improve a relationship.

  1. Confrontational words in a debate goes well when someone says "here we go again" to another contender for the same political office. I understand Chambers point here viz., leave the audit's exit meeting with positive note and expression or use a negative comment for better result and draw conclusion of the audit meeting. Once again, time is of the essence in these meetings and conclusion of the audit. Generally, lot of time are already spent by auditors in coming out with the findings for recommendation. Auditees did not make it easy for auditors to get where they were suppose to be at the end of this audit process here. It is management's drawn out disagreement on points that are not important for the conclusion of audit leaves many junior auditors disinterested in the audit process and they tend to look for job elsewhere. There is a degree of correlation and equalibrium here between management's action at the meeting in front of junior or semi senior auditors. Audit is a profession that is for the professionals. Those who want to strive and achieve that professional standard should not be afraid to achieve that professional standards because of management's unwarranted action at these meetings.

  1. Richard:
    I think the issue of audit/client relations is an important one.  Thanks for raising it.  

    My conclusion  is that a fundamental root cause is that formal assurance is currently predominantly "SUPPLY DRIVEN"   The onus is on IA and other specialist staff groups to identify and report areas where the current residual risk status is unacceptable.  There are few rewards for managers that take time to complete formal risk assessments and report situations that are outside of corporate risk appetite/tolerance. This creates ongoing friction points that are difficult to manage, no matter how polite, timely, professional, competent, well intending the IA team.

    To correct this we are recommending that our clients transition from SUPPLY DRIVEN assurance to DEMAND DRIVEN assurance. In DEMAND DRIVEN assurance a universe of important value creating/potentially value eroding objectives is created.  These are assigned to "OWNER/SPONSORS" .  OWNER/SPONSORS decide on the appropriate level of assessment rigor and report regularly on the current residual risk status.  The role of IA is ensure that the process used by OWNER/SPONSORS is effectiven and producing materially reliable information for senior executives and the board.  The shift to DEMAND DRIVEN  results in OWNER/SPONSORS asking for training on how to complete reliable risk assessments, facilitators to run workshops and, for complex objectives specialists to help complete risk assessments.  This changes the dynamics between IA and management in fundamental and positive ways.

     

     

     

  1. I do not agree with the last sentence in #2. We should not ask them how we should modify our recommendation statements. This could result in (1) loss of independence; and (2) the client using us as a stick to push their agenda. We will end up acting as consultants and not provide objective results to the client. In some cases, the clients can use the internal audit function to push their agenda against another non-cooperative business unit.
  1. Richard,

    Another good topic.  Communication is the key to building good client relationships.  There should be no surprises in the audit report.  It is best to communicate findings as they are developed.  This gives the client time to think about the issue and how to resolve the finding.

    I disagree with SBP.  Asking the client how they would modify the recommendation statement can lead to a better solution.  This does not affect objectivity.  The client should know their business better then audit.  There may be disagreements that you cannot overcome, but I have found this very rare, especially if IA has strong support from executive management.  Sometimes just changing a word or two in a report goes a long way in helping the client better except the issue, especially if the overall issue reflects badly on the client's operation.

  1. In reply to Vincent Price, I think a dialogue between the client and the auditors does help with the wording of the recommendation. But, how we choose the wording is important. We don't want the client driving the auditor's work. It needs to be a constructive synthesis of ideas between the auditors and clients. Asking them directly how they would word the recommendation may cause an "appearance" of losing our independence. If this is the case, why not ask them how would you perform the audit?

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